Spending cuts, taxes or a combination of both? What's the best way for Minnesota to make up a $1.2 billion deficit in this biennium and a possible $5.4 billion deficit in the following biennium.
Answers to those questions varied with Brainerd area state legislators who will return to the Capitol Thursday for the start of a new session.
Sen. Mary Olson, DFL-Bemidji, likened the state's borrowing money to pay for ongoing expenses to putting groceries on the credit card. She said Gov. Tim Pawlenty needs to demonstrate leadership and cautioned against making short-term decisions that might save money, only to set the state up for a fall later.
"We are no different than a family budget," she said. "We're going to have to face those tough choices. For me, my personal goal is to raise the flag as often as I can about both taxing and revenue inequities."
She said since 2003 the difference between the top 10 percent in per-pupil funding and the bottom 10 percent in per-pupil funding has grown dramatically.
Individual lawmakers, she said should bring their savings ideas to the table. She will again push for legislation that would streamline a citizen's dealings with natural resources that might have overlapping jurisdictions.
"Obviously, cuts alone can't do it but you can't raise taxes to that extent either." - Rep. Al Doty, DFL, Royalton.
"There are nine or 10 Democrats running for governor. I don't think they're going to promote a tax increase." - Rep. Larry Howes, R-Walker.
"We need to streamline and cut back the size of government. Everything needs to be on the chopping block." - Sen. Paul Koering, R-Fort Ripley.
"We are no different than a family budget. We're going to have to face those tough choices." - Sen. Mary Olson, DFL-Bemidji.
"We need to look at a long-term fix and a longer-term fix needs to have everything on the table - revenues, cuts, shifts, reform." - Rep. John Ward, DFL-Brainerd.
Olson pointed out there are empty beds in county jails and yet the state is under pressure to provide additional jail beds.
"We should look for every possible way we can to be more efficient," Olson said. "It would help to have some leadership in that area."
Rep. John Ward, DFL-Brainerd, said his decision on a deficit remedy will depend on the size of the deficit. That figure has not been determined because of a lawsuit regarding the governor's unallotment process. The retired teacher said Minnesota's budget is structurally out of balance.
"We need to look at a long-term fix and a longer-term fix needs to have everything on the table - revenues, cuts, shifts, reform."
Rep. Larry Howes, R-Walker, said the governor has adamantly said no to tax increases and the fact that several lawmakers are running for governor makes revenue hikes unlikely.
"You'd really have to push hard and when you really have to push hard it usually doesn't have a good outcome," he said. "There are nine or 10 Democrats running for governor. I don't think they're going to promote a tax increase ... It's just not going to work. I believe it should be all done with cuts."
Rep. Al Doty, DFL-Royalton, said it will take a combination of cuts and tax increases. He said there were no favorable options this year only necessary decisions.
"Neither one of those can do it by themselves," he said. "If you fired everybody that's fireable ... Obviously cuts alone can't do it but you can't raise taxes to that extent either.
"The key, of course, is obviously expanding the economy."
While stating the Legislature would cut everything it could, two questions should be asked about each cut, he said. The questions are: How many jobs does this cost and Is this going to cost us money down the road?
"We need to be responsible here and try to take care of this problem as best we can," Doty said. "We can't continue to put things off on the next generation and the next Legislature."
Tax increases are off the table as far as Sen. Paul Koering, R-Fort Ripley, is concerned.
"We need to streamline and cut back the size of government," he said. "In the past few years areas of the budget have been off the table. Everything needs to be on the chopping block."
Those previously exempt categories, he said, included education and public safety.
"We're in critical times," he said. "The notion that we can tax our way out of the problem we're in is not going to work anymore."
The state lawmakers all agreed that a bonding bill would boost the economy and they offered additional ideas that would help develop jobs.
Olson advocated programs that would free up venture capital, making government requirements user-friendly, investing in education so we have a strong work force.
"I believe a bonding bill is a critical help to job growth in the state," Ward said.
He also wanted to see tax incentives or credits for small businesses to spur employment.
Howes suggested cutting taxes to businesses as an incentive to hire people. He predicted the House would pass a bonding bill by Feb. 9 and that the governor would likely use his line-item veto powers to bring the dollar total down to his preferred amount.
Doty said bonding projects will have to be of a regional nature to survive the cut and not be excised by the governor's red pen.
"We'll be looking at two things," Doty said. "First is how many jobs are created and how quick are you ready to go."
Koering said he was supportive of a bonding bill, particularly if it includes a training center that's been requested at Camp Ripley. A bonding bill, he said, would create short-term jobs but would not be a savior of the economy.
He said he doesn't apologize for advocating worthwhile bonding projects in his district. He said he has declined to support district projects, such as the proposed fine arts center on the Central Lakes campus in Brainerd, when he did not think they were high priority.
In an effort to counter education funding inequities, Olson would like to see the property tax revenue generated by seasonal properties go to individual school districts. With more miles of road to cover and struggling economies rural school districts it often costs more to educate outstate Minnesota school children then their Twin Cities counterparts, Olson said.
Ward said equitable, adequate, consistent and sustainable education funding is justifiable as an economic package. He is co-author of a bill that would realign education funding.
"Even during the Depression, the leaders at that point had the intelligence and the will to make sure education was funded properly so as the economy improved we had an educated work force."
Although he is not advocating the idea, Howes said an expansion of the sales tax would provide the most consistent funding stream. He noted that Mississippi legalized river gambling money in order to support education, but said that would never pass in the Senate.
Doty said a consistent funding source for education is a necessity and the entire school funding system needs to be overhauled.
"The (school aid) formulas, many of them are skewed favoring the metro area or suburban districts," Doty said. "The need per-person is greater out here."
Koering warned that although education was important the Legislature might not be able to prevent it from being cut. He said he had no ideas how the state might devise consistent funding for education.
"It would involve revenue and I don't know where that's going to come from," Koering said.
MIKE O'ROURKE may be reached at email@example.com or 855-5860.
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